HUNTSVILLE, Alabama – Scanning a rack of black pants at Parkway Place Mall on Friday afternoon, Huntsville resident Kim Moon rushed as she shopped for
a last-minute outfit to wear to a party Saturday night.

Moon said she "hates" to
shop, but is among flocks of Alabamians who spend an estimated $2 billion
annually by purchasing items from online retailers that don't collect sales taxes.

"It's much easier to do it online than come into the store,"
she said. "It's much faster. I probably would've shopped for this outfit online
had I had more time."

Online shopping, which makes up 5.2
percent of retail profits and brought in $225 billion to the U.S. last year, is
growing at three times the rate of total sales, according to the Alabama Retail
Association. Retail experts predict Internet shopping will account for up to 9
percent of total U.S. revenue by 2016.

As
tax-free online shopping consumes the retail landscape, lawmakers are taking a close look at
requiring Internet retailers that bring in more than $1 million annually to
collect state and local sales taxes through the Marketplace Fairness Act.

The U.S. Senate passed the bill in early May by a vote of 69 to 27. Unless a
business has a physical presence within a state, Internet retailers are currently not
required by law to collect sales taxes.

A 2012 University of Alabama – Birmingham study shows the state will lose more
than $1 billion in sales and use taxes from untaxed online purchases during the
next five years unless laws are passed to stop it.

"Our members just want a level playing field so that certain retailers
aren't given a competitive advantage because the government doesn't compel them
to collect taxes," Nancy Dennis, spokeswoman for the Alabama Retail
Association, told AL.com and The Huntsville Times last month. "Retailers
have no problem competing on price, quality of service and buying
experience."

The influx of digital shopping has inspired big-box store
Kmart to update its retail strategies. Terry Cox, store manager for Kmart on
Memorial Parkway in Huntsville, said online shopping is something "Kmart is
really getting behind and seeing as a big thing going forward."

"I think online shopping is the future," he said. "People are getting more
computer savvy and have smart phones and are doing a lot of their shopping
online. It's not just a fraction of our business. I think online shopping is
going to be a big percentage of a lot of retailer's business in the future."

More shoppers are browsing the web for products and picking them up later in
store, Cox said. To meet consumer needs, Kmart allows customers to place an
order online and pick it up in store in two hours. In addition to online
layaway, shoppers can also order an out-of-stock item in store and have it
shipped to their home for free.

Charlotte Simmons, receptionist and store clerk at Encore
Furniture on University Drive, said her husband's consignment business launched
a website nearly four years ago. The small 18-year-old furniture company
posts weekly photos of items available in store for purchase.

Since starting the website, Simmons said she and her
husband, Dwayne, have noticed an uptick in store traffic.

"We do have people every week that either call or come in
looking for items they first saw online," she said. "It also serves our clients to see if their items are still here, if they've
been reduced and when we've taken them off the website."

But Ginger Cobl, manager of Harrison Brothers Hardware in Huntsville, said her
store doesn't have much of an online shopping presence because the merchandise,
which is often locally made, changes so frequently. The nonprofit is also run by about 80 volunteers.

Located on South Side Square, the hardware store was named one of the Department of Interior's Save America's Treasures projects in 2001.

"It's not something we're really doing at the moment," Cobl said. "We do have an email blast that goes out, but that's really the only
online shopping we're currently doing. If someone sees one of our featured
merchandise through the email alert and wants to buy it, we are happy to ship it to them."

Cobl, who prefers traditional in-store shopping
so she can touch and feel an item before she buys it, said personal attention is
important in the overall retail experience.

"I think for some businesses, online shopping is great
because you reach a much larger audience, but I'm always going to prefer the
face-to-face," she said. "That's the fun part of shopping – getting that
special attention and making someone feel welcome when they come through the
door. It makes them feel that they're genuinely glad they're here whether they
purchase something or not."

The emergence of online shopping scams in recent years has
forced the Better Business Bureau to issue consumer alerts on identity and financial information protection.

"More people are turning to online shopping to avoid the
hassle of parking or standing in line at stores," said BBB official Michelle L.
Corey. "While online shopping may be convenient, the Internet also is rife with
scams that can part consumers from their money or hijack their personal
information."

To protect themselves against shopping scams, the BBB recommends consumers
download firewall, anti-virus and anti-spyware software on their
computers, as well as check a website's security settings, shop trustworthy
businesses and avoid too-good-to-be-true deals.

Customers can dispute charges for an item they paid for
online with a credit card and don't receive. Federal law allows shoppers to
report such incidences if the item was not shipped as
promised or within 30 days if no delivery time was given.